Comparison of Business Entities & Firms In Singapore

Comparison of Singapore Business Entities And Firms

Comparison Of Business Firms And Entities In Singapore

Here we bring you to a comparison together with the chart of pros / advantages or cons / disadvantages of different types of business structures / forms / organisations / firms / entities in Singapore.

Click here to view the comparison of Singapore Entities & Firms (In PDF).
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COMPARISON OF SINGAPORE BUSINESS ENTITIES (V-201901)

Features
Company
Sole-Proprietorship
Partnership (General)
Limited Partnership (LP)
Limited Liability Partnership (LLP)
Introduction
  • One of the most preferred corporate vehicle for wider range of business journey
  • A basic & simple form of starting the business vehicle

 

  • A basic form of business vehicle with two or more co-partners
  • Often used as investment vehicle for large projects requiring substantial source of cash
  • Hybrid form of business vehicle consisting both company and typical partnership
Suitability of Business Vehicle
  • Suitable for carrying all types of business activities including professional services
  • Suitable for a small scale business with low risks

 

 

  • Suitable for a small to medium size of business journey with co-partners

 

  • Flexibility for allowing a diversification of a portfolio
  • Suitable to carry professional services such as Law Firm, Audit Firm, etc
Definition

 

 

 

  • A business form which is a legal entity separate and distinct from its shareholders and directors
  • A business owned by one person

 

 

  • An association of two or more persons carrying on business in common with a view to profit

  • A partnership consisting of two or more persons, with at least one general partner and one limited partner
  • A partnership where the individual partner’s own liability is generally limited

Ownership or Owners

 

 

 

  • Exempt Private Company – 20 members or less and no corporation holds beneficial interest in the company’s shares
  • Private Company – 50 members or less
  • Public Company – can have more than 50 members
  • Only one person

 

 

 

  • Between 2 and 20 partners.
  • A partnership of more than 20 partners must incorporate as a company under the Companies Act, Chapter 50 (except for professional partnerships)
  • At least 2 partners; one general partner and one limited partner.
  • No maximum limit.
  • At least 2 partners.
  • No maximum limit.

 

 

 

 

 

 

 

Legal Identity or Status
  • A separate legal entity from its members and directors
  • Members have limited liability
  • Can sue or be sued in company’s name
  • Can own property in company’s name
  • Members not personally liable for debts and losses of company
  • Not a separate legal entity
  • Owner has unlimited liability
  • Can sue or be sued in individual’s own name
  • Can also be sued in business name
  • Can own property in individual’s name
  • Owner personally liable for debts and losses of business
  • Not a separate legal entity
  • Partners have unlimited liability
  • Can sue or be sued in firm’s name
  • Cannot own property in firm’s name
  • Partners personally liable for partnership’s debts and losses incurred by other partners
  • Not a separate legal entity
  • General partner has unlimited liability
  • Limited partner has limited liability
  • Can probably sue or be sued in firm’s name
  • Cannot own property in firm’s name
  • General partner personally liable for debts and losses of the LP
  • Limited partner not personally liable for the debts or obligations of LP beyond amount of his agreed contribution
  • A separate legal entity from its partners
  • Partners have limited liability
  • Can sue or be sued in LLP’s name
  • Can own property in LLP’s name
  • Partners personally liable for debts and losses resulting from their own wrongful actions
  • Partners not personally liable for debts and losses of LLP incurred by other partners
Requirements For Registration or Formation or Incorporation
  • Minimum of one share.
  • Minimum Paid-up capital is S$1 (SGD One Only)
  • At least one shareholder.
  • At least one director ordinarily resident in Singapore, at least 18 years old.
  • If a foreigner wishes to act as a local director of the company, he can apply for an EntrePass from the Ministry of Manpower (MOM).
  • Undischarged bankrupts cannot be a director and cannot manage a company without approval from the Court or the Official Assignee.
  • Age 18 years or above. Singapore citizen / Singapore Permanent Resident / EntrePass holder.
  • If owner not resident in Singapore, he must appoint an authorized representative who is ordinarily resident in Singapore.
  • Self-employed persons must top up their Medisave account with the CPF Board before they register a new business name, become a registrant of an existing business name, or renew their business name registration.
  • Undischarged bankrupts cannot manage the business without approval from the Court or the Official Assignee.
  • Age 18 years or above. Singapore citizen / Singapore Permanent Resident / EntrePass holder.
  • If owner not resident in Singapore, he must appoint an authorized representative who is ordinarily resident in Singapore.
  • Self-employed persons must top up their Medisave account with the CPF Board before they register a new business name, become a registrant of an existing business name, or renew their business name registration.
  • Undischarged bankrupts cannot manage the business without approval from the Court or the Official Assignee.
  • At least one general partner and limited partner. Both can be individuals (at least 18 years old) or body corporate (company or LLP).
  • If all general partners are ordinarily resident outside Singapore, they must appoint a local manager who is ordinarily resident in Singapore.
  • Self-employed persons must top up their Medisave account with the CPF Board before they register as a partner of a new LP, become a registered partner of an existing LP, or renew their LP registration.
  • Undischarged bankrupts cannot manage the business without approval from the Court or the Official Assignee.
  • At least two partners, who can be individuals (at least 18 years old) or body corporate (company or LLP).
  • At least one manager ordinarily resident in Singapore and at least 18 years old.
  • Undischarged bankrupts cannot manage the business without approval from the Court or the Official Assignee.
Easiness of Registration
  • An easy process to be completed within a few hours however subject to referral to different authorities which may delay up to 14 working days
  • An easy process to be completed within a few hours however subject to referral to different authorities which may delay up to 14 working days
  • An easy process to be completed within a few hours however subject to referral to different authorities which may delay up to 14 working days
  • An easy process to be completed within a few hours however subject to referral to different authorities which may delay up to 14 working days
  • An easy process to be completed within a few hours however subject to referral to different authorities which may delay up to 14 working days
Level of Fees for Registration
  • High when comparing to other form of business vehicles
  • Low set up costs among all business vehicles
  • Low set up costs among all business vehicles
  • Low set up costs among all business vehicles
  • Low set up costs among all business vehicles
Renewal Costs
  • Perpetual succession hence renewal is not applicable
  • Low costs for renewal
  • Low costs for renewal
  • Low costs for renewal
  • Perpetual succession hence renewal is not applicable
Perception of Business by the Public
  • Regarded more trust worthy and credibility
  • Regarded least trust worthy and credibility
  • Regarded least trust worthy and credibility
  • Regarded moderate trust worthy and credibility
  • It is common with specific professions hence it is easily and strongly regarded more trust worthy and credibility
Funding Opportunities
  • Avenue for equities from members including venture capital funding.
  • Obtaining financial loans is relatively easier compared to other form of businesses.
  • Obtaining loans from banks is only by mortgaging the personal assets.
  • Capital injection is limited to the new partner.
  • Obtaining loans from banks is only by mortgaging the personal assets of the partners.
  • Obtaining loans from banks is only by mortgaging the personal assets of the partners.
  • Obtaining loans from banks is only by mortgaging the personal assets of the partners.
Yearly Statutory Obligations
  • Must appoint a company secretary within 6 months of incorporation.
  • Must appoint an auditor within 3 months after incorporation, unless the company is exempt from audit requirements.
  • Annual returns must be filed.
  • Statutory requirements for general meetings, directors, company secretary, share allotments must be complied with.
  • Yearly renewals (one year or three years)
  • CPF Medisave Top-Up required for Self-employed Persons before they can renew sole-proprietorship
  • Yearly renewals (one year or three years)
  • CPF Medisave Top-Up required for Self-employed Persons before they can renew partnership
  • Yearly renewals (one year or three years)
  • CPF Medisave Top-Up required before they can renew LP
  • Annual declaration of solvency / insolvency must be lodged by one of the managers stating whether the LLP is able or not able to pay its debts during the normal course of business.
  • No statutory requirement for general meetings, directors, company secretary, share allotments etc.
Taxation
  • Profits taxed at corporate tax rates
  • Profits taxed at owner’ personal income tax rates
  • Profits taxed at partners’ personal income tax rates
  • Profits taxed at partners’ personal income tax rates (if individual) / corporate tax rate (if corporation)
  • Profits taxed at partners’ personal income tax rates (if individual)/ corporate tax rate (if corporation)
Taxation Form
  • ECI & Form C or C-S
  • Form B
  • Form P for Partnership & Form B for respective Partners
  • Form P for Partnership & Form B for respective Partners
  • Form P for Partnership & Form B for respective Partners
GST Implication
  • GST obligation is at entity level based on own turnover
  • Based on combined turnover of all of your sole proprietorship firms plus income derived from other trades, professional services or vocation
  • Based on combined turnover of all partnership businesses with the same composition (structure) of partners
  • Based on combined turnover of all partnership businesses with the same composition (structure) of partners
  • Based on combined turnover of all partnership businesses with the same composition (structure) of partners
Perpetual Existence in Law
  • A company has perpetual succession until wound up or struck off.
  • Existence subject to life of the owner and cessation of the business
  • Existence subject to partnership agreement
  • Existence subject to partnership agreement
  • If there is no limited partner, the LP registration will be suspended and general partners are deemed registered under the Business Registration Act.
  • Once a new limited partner is appointed, the registration of the LP will be restored to “live” and general partners’ registration under the Business Registration Act ceases.
  • The LLP has perpetual succession until wound up or struck off.
Transfer of Ownership
  • Ownership can be transferred by sale and purchase of shares
  • When the owner exits the sole proprietorship will cease
  • Owner can be changed to somebody else
  • Partners can be changed
  • Partners or corporate bodies can be changed
  • Partners can be changed
Closing the Business or Deregistration
  • Winding Up – Voluntarily by members or creditors, compulsorily by the High Court.
  • Striking off
  • By Owner – Cessation of business,
  • Registrar can cancel registration if not renewed or where Registrar is satisfied business is defunct
  • By the partners – Cessation of business.
  • Registrar can cancel registration if not renewed or where Registrar is satisfied business is defunct
  • By general partner – Cessation of business or dissolution of LP.
  • Registrar can cancel registration if not renewed or where Registrar is satisfied business is defunct
  • Winding Up – Voluntarily by members or creditors, compulsorily by the High Court.
  • Striking off

 

Source of Information, Guidelines, Compliance, Laws, Rules & Regulations is from the websites of relevant authorities of Singapore
Details of SourceName of Authorities
  • Corporate matters such as Companies, Businesses, etc
  • The Accounting and Corporate Regulatory Authority (ACRA)
  • CPF matters
  • CPF Board
  • Fair Employment Practices (FEP)
  • Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP)
  • Immigration matters & Student Passes
  • Immigration Checkpoints Authority (ICA)
  • Taxation and GST
  • The Inland Revenue Authority of Singapore (IRAS)
  • Skills Development Levy (SDL)
  • SkillsFuture Singapore Agency
  • Work Passes
  • The Ministry Of Manpower (MOM)

 

Please refer to GUIDES for Type of Firms & Entities for more details, information or  CONTACT us if you wish to know about these or many other services.